The European Union has handed out its first major fines under the new Digital Markets Act (DMA), slamming Apple with a €500 million penalty and Meta with €200 million.
These sanctions, announced on Wednesday, mark a new era in Europe’s crackdown on Big Tech dominance.
The fines come amid rising trade tensions, especially with U.S. President Donald Trump reportedly considering retaliatory tariffs on countries that penalise American companies.
If implemented, this could escalate into a broader transatlantic tech-trade clash.
Apple, Meta hit back
In a strongly worded statement, the iPhone maker accused the European Commission of unfair treatment.
“These decisions are bad for the privacy and security of our users, bad for products, and force us to give away our technology for free,” Apple said.
- The tech giant argued that the EU is unfairly targeting successful American companies, while letting European and Chinese firms operate under a different set of rules.
- Meta, which owns Facebook and Instagram, also criticized the ruling, saying it’s being forced to overhaul its business model. The company had introduced a “pay-or-consent” option in late 2023, allowing users to choose between a free, ad-supported experience (with tracking) or a paid ad-free version.
- The EU says that model breaches the DMA, and Meta now has two months to make changes or face daily fines.
What the EU wants changed
The EU competition watchdog said Apple must remove technical and commercial restrictions that prevent app developers from steering users to cheaper deals outside the App Store.
It said Meta’s pay-or-consent model introduced in November 2023 breached the DMA.
The model gives Facebook and Instagram users who consent to be tracked a free service that is funded by advertising revenues. Alternatively, they can pay for an ad-free service.
Meta is discussing with the EU a new version introduced in November last year. The companies have two months to comply with the orders or risk daily fines.
Apple avoided a fine in a separate investigation into its browser options on iPhones after making changes that allow users to switch to a rival browser or search engine more easily. Regulators said these comply with the DMA and closed the investigation on Wednesday.
- The iPhone maker was still charged with breaching DMA rules on the grounds that it hindered users from sideloading, a practice that involves downloading alternative app stores and apps from the web.
- Regulators criticised Apple’s conditions, which include a new fee called Apple’s Core Technology Fee, saying these serve as a disincentive for developers to use alternative app distribution channels on its mobile operating system iOS.
- The EU regulator also dropped Meta’s Marketplace’s designation as a DMA gatekeeper because the number of users fell below the required threshold.
More fines coming
EU regulators made it clear that more enforcement is on the horizon. Meta’s Marketplace, which initially qualified as a DMA gatekeeper, has now been delisted due to a drop in user numbers.
But the EU is still pursuing investigations into Google’s adtech empire and Elon Musk’s X (formerly Twitter).
EU’s current competition boss, Teresa Ribera, summed it up:
“We have taken firm but balanced enforcement action… All companies operating in the EU must follow our laws and respect European values.”
European lawmakers like Andreas Schwab are urging the Commission not to backpedal under U.S. pressure.
“There can be no leeway in enforcement… Linking decisions to trade policy is dangerous for the whole EU construction,” he said.
More insights
The Digital Markets Act, which took effect in 2023, is the EU’s ambitious legislation designed to rein in the power of tech giants and open the playing field for smaller digital competitors. Wednesday’s fines followed a year-long probe into whether Apple and Meta were playing by the new rules.
While €700 million in combined fines might sound hefty, they’re modest compared to those handed out by former EU antitrust chief Margrethe Vestager.
Insiders say this is partly because the breaches were recent, and the Commission is more focused on pushing compliance than racking up big sanctions, at least for now.
